Oct 26, 2021
Did you know that signing a notarized contract between a buyer and a seller is now practically mandatory for every real estate transaction? This requirement is entirely in your favor - A detailed, transparent, and enforceable sales contract will protect you from unexpected situations. The first step to own property in Vietnam for foreigners, understanding this contract is crucial for property transaction in the market.
This article covers everything you need to know about a sales contract. What exactly is it? Why should you read it thoroughly? Where to begin? Let us guide you through the specifics.
Buying and selling real estate is more than simply exchanging money for a property.
To govern this process and protect both the buyer and seller, a Sales and Purchase Agreement (SPA) is necessary. A written and notarized SPA is required under Vietnamese law; thus, you should not rely solely on verbal or handwritten agreements.
The SPA is signed after the seller has received a deposit from the buyer; with the SPA signed, the buyer becomes the property’s new owner.
While many SPA templates are available on the internet, we suggest that you work with a reputable notary office. The notary can both advise on the contract and authenticate it.
Now, we will go over a sample contract together and run through all the vital information that will come in handy!
On the first page of this contract, there are three main sections of information:
1. Seller Information:
The seller could be an individual or a company that owns the property. This section contains their:
2. Buyer Information:
Similarly, information about the buyer must also include their:
3. Can I appoint someone to buy or sell on my behalf?
Yes! The buyer or seller can appoint a third party unaffiliated with the property to act as their representative.
Top tip: Do note that if you appoint an attorney to sell your property, you will be liable for double income taxation in Vietnam.
4. The property information:
Here you will find key details of the property. Different information is noted depending on the type of property. For example, for:
Top tip: Use the pink book to check if the information is updated
On the second and third pages, the main terms of the contract will show:
1. The selling price:
The property selling price is the agreed-upon price between the buyer and the seller. You must write this price in both letters and numerical form in Vietnam’s currency (VND). Whether this amount is inclusive or exclusive of additional items should be clearly stated. Some examples include whether the price consists of furniture or whether the buyer would be obliged to pay any remaining developer fees.
2. Related fees:
The property selling price may not include all payable fees; other fees may consist of:
3. Payment method:
Generally, the SPA will specify the method of payment, via cash or bank transfer.
However, if flexibility is required, both parties can mutually agree on a payment method and leave this information out of the contract.
4. Contract terms about property ownership and handing over the property:
After the buyer has paid in full for the property, the seller will hand it over to the buyer. The buyer will then receive related documents, including:
This process is carried out based on mutually agreed terms.
Top tip: Confirm which party will pay for fees and taxes, as well as who is responsible for transferring the property documents/ pink book to the new owner’s name. Generally, it is the buyer who is responsible for this. You may want to hire real estate agent services to assist you with the process for convenience and efficiency.
5. How do you resolve a dispute?
Buying and selling property is a complicated process, and you might find yourself embroiled in disputes.
Both parties will usually try to manage disputes through private negotiations. If need be, we can escalate this to taking legal action.
This page notes that both parties agree and accept the terms of the contract.
Top tip: Double-check all the information before signing and notarizing it. In addition to signing the contract, the parties could add their fingerprints to the document for further authenticity.
Page 4 includes the time and place of notarization and the notary’s testimony. Here, you can also find the notary details and their stamp and signature.
Top tip: The notarization number can come in handy if you need to prove ownership of the property in the future.
With our vast experience in real estate transactions, we are more than happy to help you with yours. You can reach us easily by phone/Zalo/WA at (+84) 964 245 404 or email at email@example.com.
Our team can help with every question you might have about how to own property in Vietnam for foreigners. Ready to take the first step?
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